Income tax Payment 2020: Is your liability over Rs 10,000? Pay Advance Tax before June 30 – Here’s why

Income Tax Payment Due Date 2020: In one of her recent press conferences, Finance Minister Nirmala Sitharaman announced that the due date for Income Tax Return filing for AY 2020-21 has been extended to 30th November 2020 from July/October 2020. The Central government has also extended the date for payment of advance tax for FY 2019-20 to 30th June 2020. The extension of the last date of income tax return filing will benefit those who don’t have to pay advance tax. However, for taxpayers under the advance tax bracket, it is advisable to deposit taxes before June 30 to avoid any interest on ta liability, according to Sameer Mittal, Managing Partner, Sameer Mittal and Associates LLP and Chairman, International Trade Council in India.

Mittal told FE Online that primarily, section 234 A/B/C and 234E are sections covering interest and penalties on taxes on delay in advance tax and income tax return. He explained what taxpayers must understand from extensions of ITR filing and Advance Tax payment dates.

Even as the return filing date has been extended, Mittal said that interest on advance tax will be levied if not paid before June 30. “This extension of date for return filing will only give you relief from interest under section 234A and penalty under 234E for the delay in Income tax return filing but interest under section 234B and 234C will continue to be levied after 30th June for every delay in paying the taxes related to FY 19-20.”

Who can enjoy ITR date extension

Mittal said that in case of someone, who is not under the bracket of advance tax, he can enjoy this extension relief. However, he suggested, “Otherwise, we have a suggestion to all taxpayers to pay all their tax liabilities related to FY 19-20 before 30th June 2020 to save interest on taxes and file their returns before the extended date to avoid further interest and penalties.”

Section 234E, which includes penalties for delay in income tax return filing, will not be applicable if a person files its return before the extended date of return.

Advance tax implications

Mittal further explained that advance tax date is extended till 30th June. So, taxpayers who are falling under the cap of Advance tax should discharge their tax liability before 30th June to avoid any interest liability. interest liability can arise only if tax dues are not paid by the due date prescribed.

Who needs to pay advance tax

“Under income tax law, if taxpayers’ tax liability is more than Rs 10,000(except for senior citizen not having business income), then taxpayers are subject to payment of advance tax,” said Mittal.

“Hence, a taxpayer, who is liable to pay income tax of more than Rs 10,000 in FY 2019-20, was required to discharge its tax liability on or before 15th March 2020 (last date for the last instalment of advance tax). However, under the reliefs provided by government due to Covid-19, the last date for payment of advance tax was extended from 15th March 2020 to 30th June 2020. So we suggest taxpayers to deposit taxes before 30th June to avoid any interest on tax liability,” he concluded.

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